MLB players, owners reach tentative labour deal

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FILE - At left, in a March 17, 2015, file photo, Major League Baseball Players Association executive and former Detroit Tigers first baseman Tony Clark talks to the media before a spring training exhibition baseball game in Lakeland, Fla. At right, in a May 19, 2016, file photo, Baseball Commissioner Rob Manfred speaks to reporters during a news conference at Major League Baseball headquarters in New York. Negotiators for baseball players and owners are meeting this week in Irving, Texas, in an attempt to reach agreement on a collective bargaining agreement to replace the five-year contract that expires Thursday, Dec. 1, 2016. (AP Photo/File)

By:Stephen Hawkins And Ronald BlumThe Associated Press Published on

IRVING, Texas — Baseball players and owners reached a tentative agreement Wednesday on a five-year
labour
contract that will extend the sport's industrial peace to 26 years.

After days of near round-the-clock talks, negotiators reached a verbal agreement about 3-1/2 hours before the expiration of the current pact. Then they worked to draft a memorandum of understanding, which must be ratified by both sides.

One key issue was the level of 'luxury tax' which is a tax paid by teams that exceed a set level of salary payments; effectively operating as a soft salary cap.

As part of the new deal, the level at which the luxury tax kicks in rises from $189 million this year to $195 million next year, $197 million in 2018, $206 million in 2019, $209 million in 2020 and $210 million in 2021, a person familiar with the agreement told The Associated Press. The person spoke on condition of anonymity because the deal had not yet been signed.

Teams that exceed those amounts must pay a percentage of the amount by which they go over. The rate will increase from the current 17.5
per cent
to 20
per cent
of excess payments for first offenders, remain at 30
per cent
for second offenders and rise from 40
per cent
to 50
per cent
for third offenders. There is a new surtax of 12
per cent
for teams $20 million to $40 million above the threshold, 42.5
per cent
for first offenders more than $40 million above the threshold and 45
per cent
for subsequent offenders more than $40 million above.

A player can receive a free-agent qualifying offer only once in his career and will have 10 days to consider it, instead of seven. A club signing a player who failed to accept a qualifying offer would lose its third-highest amateur draft pick if it is a revenue-sharing receiver, its second- and fifth-highest picks (plus a loss of $1 million in its international draft pool) if it pays luxury tax for the just-ended season, and its second-highest pick (plus $500,000 in the international draft pool) if it is any other team.

A club losing a free agent who declined a qualifying offer would receive an extra selection after the first round of the next draft if the player signed a contract for $50 million or more and after the competitive balance B round if under $50 million. However, if that team pays luxury tax, the extra draft pick would drop to after the fourth round.

Among other details:

-For a team $40 million or more in excess of the luxury tax threshold, its highest selection in the next amateur draft will drop 10 places.

-There will not be an international draft of amateurs residing outside the U.S., Puerto Rico and Canada, but there will be a hard cap on each team's annual bonus pool for those players, starting at $4.75 million for the signing period that starts next July 2.

-There is no change to limits on active rosters, which remain at 25 for most of the season and 40 from Sept. 1 on.

-The regular season will lengthen from 183 days to 187 starting in 2018, creating four more scheduled off days. There are additional limitations on the start time of night games on getaway days.

-The minimum salary rises from $507,500 to $535,000 next year, $545,000 in 2018 and $555,000 in 2019, with cost-of-living increases the following two years; the minor league minimum for a player appearing on the 40-man roster for at least the second time goes up from $82,700 to $86,500 next year, $88,000 in 2018 and $89,500 in 2019, followed by cost-of-living raises.

-As part of the drug agreement, there will be increased testing, players will not be credited with major league service time during suspensions, and biomarker testing for HGH will begin next year.

Baseball had eight work stoppages from 1972-95, the last a 7 1/2-month strike in 1994-95 that led to the first cancellation of the World Series in 90 years. The 2002 agreement was reached after players authorized a strike and about 3 1/2 hours before the first game that would have been impacted by a walkout.